Tuesday, June 21, 2016

Technology (XLK): Something Is Beginning To Worry Me

I mentioned this one this past weekend and the condensing triangle is continuing to hold but strangely while it is within the ascending wedge (very bearish). What is most worrisome though is the size and breadth of the ascending wedge, almost a year old and covering a huge price rise. While it is still within the condensing triangle room is quickly running out for XLK to go anywhere except down. Right now it's holding at the final support line but XLK is looking like a strong short/sell at the moment. Be careful though, that just because the wedge breaks down doesn't mean the condensing triangle pattern won't also continue to play out laterally before also deciding which direction to take (most likely also down in my opinion). XLK is currently coming out of a short-term overbought phase so a bounce is expected here to about $44.25 before we see some real movement.